SCHAUFFLER EX REL. NLRB v. BREWERY & BEER DISTRIB.

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA

May 1, 1958

Bennet F. SCHAUFFLER, Regional Director of the Fourth Region of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Petitioner,
v.
BREWERY AND BEER DISTRIBUTOR DRIVERS, HELPERS and PLATFORM MEN, LOCAL 830, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, INDEPENDENT, Respondent

The opinion of the court was delivered by: DUSEN

This cause came on to be heard upon the petition with attached supporting affidavit of Bennet F. Schauffler, Regional Director of the Fourth Region of the National Labor Relations Board (herein called the Board), for a temporary injunction pursuant to Section 10(l) of the National Labor Relations Act, as amended (herein called the Act), 29 U.S.C.A. § 160(l), pending the final disposition of the matters involved pending before said Board, and upon the issuance of an order to show cause why injunctive relief should not be granted as prayed in said petition. Respondent filed an answer to said petition. A hearing on the issues raised by the petition and answer was duly held beginning on April 8, 1958. All parties were afforded full opportunity to be heard, to examine and cross-examine witnesses, to present evidence bearing on the issues, and to argue on the evidence and the law. The Court has fully considered the petition, answer, evidence, and arguments and briefs of counsel. Upon the entire record the Court makes the following:

Findings of Fact.

1. Petitioner is Regional Director of the Fourth Region of the Board, an agency of the United States, and filed this petition for and on behalf of the Board.

2. Respondent Brewery and Beer Distributor Drivers, Helpers and Platform Men, Local 830, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Independent, an unincorporated association, is a labor organization within the meaning of Sections 2(5), 8(b) and 10(l) of the Act, and at all times material herein has been engaged within this judicial district in transacting business and in promoting and protecting the interests of its employee members.

3. On or about March 13, 1958, Delaware Valley Beer Distributors Association (herein called Association), pursuant to the provisions of the Act, filed a charge with the Board alleging that respondent has engaged in, and is engaging in, unfair labor practices within the meaning of Section 8(b), subsection (4)(A) of the Act.

4. Said charge was referred to petitioner as Regional Director of the Fourth Region of the Board for investigation, and was investigated by petitioner and under his supervision.

5. There is and petitioner has reasonable cause to believe that:

(a) Association is composed of approximately 27 members each of whom is engaged in the distribution of beer in the City of Philadelphia.

(b) C. Schmidt and Sons, Inc. (herein called Schmidt), Harry F. Ortlieb Brewing Company (herein called Ortlieb), Esslingers, Inc. (herein called Esslinger), and William Gretz Brewing Company (herein called Gretz), and herein collectively called the Brewers, are each engaged within the Eastern District of Pennsylvania in the manufacture and sale of beer and related malt products. During the past year Schmidt, Ortlieb, Esslinger and Gretz each sold and shipped beer and related products valued at in excess of $ 50,000 directly from their respective plants in the Eastern District of Pennsylvania, to points and places outside the Commonwealth of Pennsylvania.

(c) Scott and Grauer, Antonio Origlio (herein called Origlio), Smiler Beverage Company (herein called Smiler), and herein collectively called Importing Distributors, are engaged at Philadelphia, Pennsylvania, in the sale and distribution of beer. During the past year Scott and Grauer purchased and caused to be shipped beer valued at in excess of $ 500,000 to their respective establishments in Philadelphia, Pennsylvania, directly from points and places outside the Commonwealth of Pennsylvania.

1. This Court has jurisdiction of the parties and the subject matter of this proceeding, and under Section 10(l) of the Act, has jurisdiction to grant injunctive relief. See Discussion attached (post, p. 6).

2. Respondent is a labor organization within the meaning of Sections 2(5), 8(b) and 10(l) of the Act.

3. There is reasonable cause to believe that:

(a) Schmidt, Ortlieb, Esslinger, Gretz, and Scott and Grauer, are engaged in commerce within the meaning of Section 2, subsections (6) and (7) of the Act.

(b) Respondent has engaged in unfair labor practices within the meaning of Section 8(b), subsection (4)(A) of the Act, and affecting commerce within the meaning of Section 2, subsections (6) and (7) of the Act, and that a continuation of these practices will impair the policies of the Act as set forth in Section 1(b) thereof.

There is, and petitioner has, reasonable cause to believe the following paragraphs:

Respondent Local 830 had 3-year contracts with both importing distributors (referred to in the testimony as ID -- N.T. 287 ff.) and domestic distributors (referred to in the testimony as D or DD) expiring on September 30, 1957. Negotiations for renewal of the contract with the domestic distributors commenced in September 1957, and by December 1957 most, if not all, of the terms of that contract had been agreed upon between the representatives of the respondent and those of the domestic distributors. The latter were represented in September 1957 by the Philadelphia Beer Distributors Association (hereinafter called 'Philadelphia'), but in the winter of 1958 several of these distributors, being dissatisfied with the negotiations,
*fn2"
withdrew from Philadelphia and formed the Delaware Valley Beer Distributors Association (hereinafter called 'Delaware Valley'), which filed the charges leading to the institution of this suit. Although the agreements between some of the distributors who are now members of Delaware Valley and Philadelphia authorized the latter to 'negotiate' and 'execute, in the name and in behalf of the Member, any and all contracts * * *,' these documents were dated at various times between 2/11/46 and March 1957 (N.T. 446-7), and, in practice, the association never signed a union contract on behalf of its members, but these members signed their own contracts with the union (N.T. 327 and 406). Each member had the right at any time to negotiate for himself and he was not bound by the negotiations of the association.
*fn3"

The activities complained of must affect interstate commerce in order to bring them within the jurisdiction of the Board.
*fn4"
In this case, the Regional Director concluded that there is reasonable cause to believe that the unfair labor practices charged affect commerce by interrupting and tending to impede and disrupt the business of a number of concerns engaging in the brewing and distribution of beer. There is nothing in the record to show that the Director's finding of reasonable cause was unwarranted. Each of four breweries involved during the past year sold and shipped beer and related products valued at more than $ 50,000 from its plant to places outside of Pennsylvania. One of the importing distributors purchased and caused to be shipped beer valued at in excess of $ 500,000 to its establishment in Philadelphia, Pa., from points and places outside that Commonwealth.
*fn5"

Congress gave the Board authority to prevent practices tending to lead to a labor dispute burdening or obstructing commerce or the free flow of commerce and, therefore, left it to the Board to ascertain whether prescribed practices would, in particular situations, adversely affect commerce when judged by the full reach of the constitutional power of Congress.
*fn6"

The minimum jurisdiction standards of the Board are set forth in Jonesboro Grain Drying Cooperative, 110 N.L.R.B. 481 (1954). If the business of the secondary employer is to be considered on its entirety, the four breweries named in the petition meet the jurisdictional requirements under the Direct Outflow Standard
*fn7"
and one of the importing distributors, Scott & Grauer, meets the Direct Inflow Standard.
*fn8"

In secondary boycott cases, the Board has said, in the McAllister Case, 110 N.L.R.B. 1769, 1772 (1954): 'It is not the particular business between the primary employer and the secondary employer at the location affected, but rather the entire business of the secondary employer at that location that governs in applying the Board's jurisdictional standards.' Clearly, then, the four named breweries and Scott & Grauer (an importing distributor) come within the jurisdiction of the NLRB. The activities at Origlio's and Smiler Beverage Co. also are protected by the NLRA under the decision in the case of Teamsters and Euclid Foods, Inc., 118 N.L.R.B. No. 17 (1957),
*fn9"
since there is reasonable cause to believe that all the secondary employers were victims of a pattern of unfair labor practices.

The respondent has argued that the preliminary injunction should not issue because the equitable maxim that he who comes into equity must come in with clean hands in order to obtain relief is applicable in this proceeding. The respondent union has accused some of the charging parties of inequitable behavior during the hearing in this matter and has also filed unfair labor charges against them with the National Labor Relations Board.
*fn10"

Injunctive relief is traditionally equitable in nature. If the proceedings at issue were governed only by common law equitable rules and the defense of unclean hands were raised, the court would take into account that the defense is only applicable where there is unconscionable conduct and an adequate showing of corrupt intent,
*fn11"
that the maxim is not applicable where an inequitable result would be reached by following it,
*fn12"
and that one who comes into a court of equity is not required to come in with spotless hands.
*fn13"
Under these principles, and the rule that it is not incumbent upon the plaintiff, as part of his case, to prove that he has not failed to do equity,
*fn14"
it is not clear that those members of Delaware Valley, who have no contract with respondent, would not be entitled to relief if they were the plaintiffs

In any event, this case involves more than a request for an injunction under common law. It is brought under statutory law and the grant of the injunction depends upon the standards set forth in the statute.
*fn15"
The Court of Appeals of this Circuit has expressly disclosed that the clean hands doctrine is not applicable in a proceeding where a government agency is seeking to enforce its order in the public interest.
*fn16"
Since the fact finder in these cases is the Board, it is held that if the court finds reasonable cause to uphold the Board's charges, the injunction shall issue.
*fn17"
The fact that the Regional Director of the Board, and not Delaware Valley, is the party of record supports the application of the Eichleay doctrine. Also, it should be noted that some of the members of Delaware Valley signed neither the January agreement nor the final 1957 contract and, hence, the doctrine of unclean hands could in no event apply to them.
*fn18"
Under the facts of this record, it is 'just and proper' to issue the injunction. The breadth of the words 'induce and encourage,' as used in Section 8(b)(4) (29 U.S.C.A. 158(b)(4)), has been emphasized by the United States Supreme Court in International Brotherhood of Electrical Workers v. N.L.R.B., 1951, 341 U.S. 694, 702-703, 71 S. Ct. 954, 95 L. Ed. 1299

3. Hot Cargo Clause

Some labor-management contracts contain 'Hot Cargo' clauses, which are agreements in advance that secondary boycotts will be acceptable under certain circumstances. The legality of such clauses, in view of the terms of the Taft-Hartley Act, is in doubt. There are several cases now before the Supreme Court of the United States concerning the validity of such clauses.
*fn19"

The fact that two appellate courts hold that a hot cargo clause is no defense to conduct prescribed by Section 8(b)(4)(A) constitutes adequate basis for injunctive relief in this matter, especially when the reasoning of these courts appears convincing on the facts of this case.

In addition, even assuming so-called 'Hot Cargo' clauses valid, the clauses relied upon by the respondent are not applicable to the present situation. The union has cited Article IV of its agreement with the breweries, which applies to the latters' drivers, helpers and warehousemen,
*fn21"
and Article XIX of the contract between the union and the distributors.
*fn22"
Substantially, both contracts only provide that the refusal of an employee to load or unload a truck operated by one who is not a member in good standing of a union shall not be a violation of the contract or a cause for discharge. Since the uncontradicted record shows that all trucks owned by members of Delaware Valley were operated by persons who were members of Local 830, the clauses do not justify the respondent's appealing to persons employed by a secondary employer. In the case of the breweries, there is the added fact that persons not members of Local 830 were induced to boycott members of Delaware Valley.
*fn23"
The hot cargo clause does not confer upon respondent the right to appeal to employees not covered by the clause to refuse to perform services in violation of Section 8(b)(4)(A). Cf. General Drivers, etc. Local 886, v. N.L.R.B., 1957, 101 U.S.App.D.C. 80, 247 F.2d 71, 75

'After six years of Board and Court construction of Section 8(b)(4)(a) of the Act, the fundamental principle has been established that this section proscribes picketing at the separate premises of employers who are not a party to the picketing union's primary labor dispute.'

The case stated that the Moore Drydock principles did not have to be rejected or affirmed, since the case involved a primary employer who had a plant where the drivers entered and left at least four times a day and which had been picketed by the union from the beginning of the strike.

Although there is doubt as to whether or not the above-quoted Moore Drydock language is still the rule of the N.L.R.B. in view of the later decision in the Washington Coca Cola case, supra, even if the Moore Drydock decision in still operative, the facts in this case do not bring the union's activities within its holding.

'We may concede that the Moore Drydock doctrine would have application when the primary employer has a fixed and permanent place of business, but picketing his premises by striking employees would not in any real sense adequately publicize the labor dispute.'

In this case, as in N.L.R.B. v. United Steelworkers, supra, the record discloses adequate opportunity to reach the members of the association and their employees elsewhere than at the places picketed.

All of the domestic beer distributors involved in this action had a place of business in Philadelphia. The court has reasonable cause to believe that the employees of the domestic distributors spent more time at their employer's situs than they did at any of the breweries or importing distributors. Therefore, there was a situs at the employers' places of business where the picketing could have taken place, and this was the most feasible place to reach the employees by picketing. The fact that there was such a situs takes the case out of the Moore Drydock case, supra, where the issue was stated at page 549:

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